DoD's $67M Space & Cyber R&D contract to Radiance Technologies shows fair value, but limited competition raises concerns

Contract Overview

Contract Amount: $67,061,148 ($67.1M)

Contractor: Radiance Technologies Inc

Awarding Agency: Department of Defense

Start Date: 2019-02-28

End Date: 2024-02-27

Contract Duration: 1,825 days

Daily Burn Rate: $36.7K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: SYSTEM ENGINEERING TECHNICAL AND ASSISTANCE SERVICES (SETAS) SPACE AND CYBERSPACE SCIENCE AND TECHNOLOGY DEVELOPMENT SUPPORT

Place of Performance

Location: HUNTSVILLE, MADISON County, ALABAMA, 35805

State: Alabama Government Spending

Plain-Language Summary

Department of Defense obligated $67.1 million to RADIANCE TECHNOLOGIES INC for work described as: SYSTEM ENGINEERING TECHNICAL AND ASSISTANCE SERVICES (SETAS) SPACE AND CYBERSPACE SCIENCE AND TECHNOLOGY DEVELOPMENT SUPPORT Key points: 1. Contract awarded through full and open competition after exclusion of sources, indicating a deliberate selection process. 2. The contract's duration of 1825 days (5 years) suggests a long-term need for specialized R&D support. 3. The Cost Plus Fixed Fee (CPFF) contract type allows for flexibility but requires careful oversight to manage costs. 4. The contract is for Research and Development in Physical, Engineering, and Life Sciences, aligning with critical defense modernization efforts. 5. The award to Radiance Technologies Inc. represents a significant investment in a specific contractor for specialized services. 6. The contract's focus on space and cyberspace science and technology development is a high-priority area for the Department of Defense.

Value Assessment

Rating: fair

The contract's value of approximately $67 million over five years for specialized R&D services appears reasonable given the technical complexity and strategic importance of space and cyberspace development. Benchmarking against similar large-scale R&D contracts within the Department of Defense for advanced technology development suggests that the overall award value is within expected ranges. However, the Cost Plus Fixed Fee (CPFF) pricing structure necessitates diligent monitoring to ensure that costs remain controlled and that the fixed fee adequately compensates the contractor for their efforts without excessive profit margins.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

This contract was awarded under 'Full and Open Competition After Exclusion of Sources,' which implies that while the competition was intended to be open, specific sources were excluded from consideration. This suggests a potentially limited pool of bidders, which could impact price discovery and potentially lead to higher costs than a truly open competition with a wider range of participants. The fact that only two bids were received further reinforces the notion of limited competition.

Taxpayer Impact: The limited competition may mean taxpayers did not benefit from the most competitive pricing possible. While the exclusion of sources might be justified by specific technical requirements, it warrants scrutiny to ensure it did not unduly restrict the bidding process and inflate costs.

Public Impact

The primary beneficiaries are the Department of the Army and the broader Department of Defense, which will receive advanced research and development support in critical space and cyberspace domains. The services delivered will contribute to the development of new technologies and capabilities essential for national security in increasingly contested environments. The geographic impact is primarily within Alabama (ST), where Radiance Technologies Inc. is located, suggesting potential local economic benefits and workforce development. The contract supports a highly specialized technical workforce, likely involving scientists, engineers, and researchers in cutting-edge fields.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition may have restricted the number of potential bidders, potentially impacting cost-effectiveness for taxpayers.
The 'exclusion of sources' clause requires careful review to ensure it was justified and did not unfairly limit competition.
Cost Plus Fixed Fee contracts can incentivize cost overruns if not rigorously managed and monitored by the agency.

Positive Signals

The contract addresses critical R&D needs in space and cyberspace, areas vital for national security.
The long-term duration (5 years) indicates a stable and predictable need for these specialized services.
The award is to a single contractor, suggesting Radiance Technologies Inc. possesses unique or highly sought-after expertise in these domains.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on physical, engineering, and life sciences, excluding biotechnology. The market for defense-related R&D, particularly in space and cyberspace, is highly specialized and competitive, with significant government investment. Comparable spending benchmarks for similar advanced technology development contracts within the DoD often range in the tens to hundreds of millions of dollars over several years, reflecting the high cost of innovation and specialized expertise required.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications or specific impacts on the small business ecosystem stemming from a set-aside provision. The primary focus is on the prime contractor's capabilities.

Oversight & Accountability

Oversight for this Cost Plus Fixed Fee contract would typically be managed by the contracting officer and program management office within the Department of the Army. Accountability measures would include regular performance reviews, cost tracking, and adherence to the contract's Statement of Work. Transparency is generally maintained through contract award databases and reporting requirements, though specific project details may be sensitive. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Department of Defense Research and Development Programs
Space Force Technology Development Initiatives
Cybersecurity Research Contracts
Advanced Technology Development Contracts
Aerospace Engineering Services Contracts

Risk Flags

Limited competition may lead to suboptimal pricing.
CPFF contracts require robust cost oversight.
Exclusion of sources needs clear justification.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $67.1 million to RADIANCE TECHNOLOGIES INC. SYSTEM ENGINEERING TECHNICAL AND ASSISTANCE SERVICES (SETAS) SPACE AND CYBERSPACE SCIENCE AND TECHNOLOGY DEVELOPMENT SUPPORT

Who is the contractor on this award?

The obligated recipient is RADIANCE TECHNOLOGIES INC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $67.1 million.

What is the period of performance?

Start: 2019-02-28. End: 2024-02-27.

What is Radiance Technologies Inc.'s track record with the Department of Defense, particularly in R&D contracts?

Radiance Technologies Inc. has a history of securing contracts with the Department of Defense, often in specialized technical and engineering support roles. While specific details on their R&D performance for this particular contract are not provided in the summary data, their continued awards suggest a level of capability and past performance that meets DoD requirements. Further analysis would involve examining their contract history for similar projects, including past performance evaluations, any reported issues, and the types of technologies they have previously developed or supported for the government. Their presence in Alabama also indicates a potential focus on regional defense industry ecosystems.

How does the $67 million contract value compare to similar R&D efforts in space and cyberspace within the DoD?

The $67 million contract value over five years for specialized R&D in space and cyberspace is substantial but falls within the typical range for advanced technology development programs within the Department of Defense. Large-scale R&D initiatives in these critical domains often require significant investment due to the complexity, cutting-edge nature of the research, and the need for highly skilled personnel. For context, other major DoD R&D contracts in areas like artificial intelligence, hypersonics, or advanced materials can easily reach hundreds of millions or even billions of dollars over their lifecycle. This specific contract's value suggests a focused effort on particular aspects of space and cyberspace science and technology development, rather than a broad, overarching program.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for R&D services?

The primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for R&D services revolve around cost control and potential for scope creep. While the fixed fee provides the contractor with a defined profit margin, the 'cost plus' element means the government reimburses the contractor's allowable costs. If these costs are not rigorously monitored and controlled, they can escalate beyond initial projections, leading to a higher overall expenditure than anticipated. For R&D, where outcomes can be uncertain and requirements may evolve, there's a risk that the contractor might incur higher-than-expected expenses in pursuit of project goals. Effective oversight, detailed cost accounting, and clear performance metrics are crucial to mitigate these risks and ensure value for taxpayer money.

What does the 'Full and Open Competition After Exclusion of Sources' procurement method imply about the selection process?

The 'Full and Open Competition After Exclusion of Sources' method implies a nuanced approach to procurement. It suggests that the initial intent was to allow all responsible sources to compete (full and open). However, specific sources were subsequently excluded from this competition. This exclusion could be based on various factors, such as national security concerns, specific security clearances required, unique capabilities possessed by only a few entities, or previous performance issues. While it aims for broad competition, the exclusion narrows the field, potentially impacting the number of bids received and the ultimate price. It necessitates a clear justification for the exclusion to ensure fairness and maximize competitive opportunities where possible.

How might the limited number of bidders (2) impact the government's ability to secure the best value?

A limited number of bidders, such as the two received for this contract, can significantly impact the government's ability to secure the best value. With fewer competitors, the pressure to offer the lowest price or the most innovative solution is reduced. The government may have less leverage in negotiations, potentially leading to higher costs than if there were multiple strong contenders vying for the contract. Furthermore, a restricted bidding pool might mean that the government is not exposed to the full spectrum of available technologies or approaches, potentially missing out on more cost-effective or superior solutions. This situation underscores the importance of ensuring that the procurement strategy genuinely encourages broad participation whenever feasible.

What is the strategic importance of R&D spending in space and cyberspace for the Department of Defense?

Spending on Research and Development (R&D) in space and cyberspace is of paramount strategic importance to the Department of Defense (DoD). These domains are increasingly critical for military operations, intelligence gathering, communication, and global positioning. Adversaries are actively developing capabilities in these areas, necessitating continuous innovation by the U.S. to maintain a technological advantage. Investments in space R&D support satellite technologies for communication, surveillance, and navigation, while cyberspace R&D is crucial for defending networks, developing offensive cyber capabilities, and ensuring information superiority. Failure to invest adequately in these areas could lead to strategic vulnerabilities and a loss of operational effectiveness in future conflicts.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 2

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Radiance Technologies, Inc.

Address: 310 BOB HEATH DR NW, HUNTSVILLE, AL, 35806

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $117,401,959

Exercised Options: $117,401,959

Current Obligation: $67,061,148

Actual Outlays: $203

Subaward Activity

Number of Subawards: 564

Total Subaward Amount: $32,691,014

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: GS00Q14OADS614

IDV Type: IDC

Timeline